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Condensing complex macro readings into one number for rates
Some US macro numbers are pointing in dramatically different directions right now. Witness the stark juxtaposition between strong ongoing payrolls growth versus manufacturing and services surveys entering recessionary territory (low 40s for some components of the manufacturing PMI). And on the inflation front, while there is evidence of more subdued pipeline pressure, core inflation remains elevated (in the area of 5%). To help assess where we are in terms of rates pressure, we employ a simple model that aggregates the macro arrows pointing in different directions to a single outcome for rates. For example, readings ... (full story)